{"id":73726,"date":"2023-10-17T17:49:56","date_gmt":"2023-10-17T21:49:56","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/microsofts-undeniable-opportunity-in-ai-makes-the-stock-a-buy-says-this-bull\/"},"modified":"2023-10-17T17:50:00","modified_gmt":"2023-10-17T21:50:00","slug":"microsofts-undeniable-opportunity-in-ai-makes-the-stock-a-buy-says-this-bull","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=73726","title":{"rendered":"Microsoft\u2019s \u2018undeniable\u2019 opportunity in AI makes the stock a buy, says this bull"},"content":{"rendered":"
\n

After eating up seemingly anything to do with artificial intelligence earlier this year, Wall Street has cooled its fervor, as investors have come to realize that it will take time for most companies to see material financial benefits from the technology.<\/p>\n

Still, Microsoft\u2019s medium- to long-term opportunity with the technology is \u201cundeniable,\u201d according to Loop Capital analyst Yun Kim, who initiated coverage of Microsoft shares
\n MSFT,
\n -0.17%<\/bg-quote>
\n with a buy rating and $425 target price Monday.<\/p>\n

\n

Microsoft is \u201c[u]niquely positioned to benefit from both \u2018buy\u2019 and \u2018build\u2019 approaches to [generative AI] adoption,\u201d Kim wrote. <\/p>\n

Read: <\/strong>Should investors \u2019embrace the suck\u2019 of software stocks? Here\u2019s what history has to say.<\/p>\n

The company\u2019s Azure cloud-computing business \u201cis currently benefiting from its OpenAI Services offerings that those who are using the \u2018build\u2019 approach to GenAI technology,\u201d he noted, adding that AI-related workloads will continue to help the Azure business.<\/p>\n

At the same time, he\u2019s also upbeat about next month\u2019s expected general availability of Microsoft 365 Copilot, which he views as perhaps the industry\u2019s largest generative AI application. <\/p>\n

\u201cWe expect M365 Copilot adoption to be strong based on positive feedback from global system integrators (GSIs) who expect most large organizations to adopt a \u2018buy\u2019 approach to GenAI,\u201d Kim wrote. The product can deliver a \u201cstrong incremental tailwind\u201d to Microsoft\u2019s Office business, but that could take some time, in his view \u2014 \u201cmuch of the meaningful impact [will] likely be in FY25.\u201d<\/p>\n

See also: <\/strong>Microsoft to lift dividend by 10%, though new implied yield still among the lowest for Dow dividend payers<\/p>\n

Kim said he sees other reasons to cheer Microsoft\u2019s stock as well. For one, he said he sees signs that customers\u2019 cloud \u201coptimization\u201d efforts are starting to wane, which could be another benefit for the Azure business. <\/p>\n

Additionally, Kim likes Microsoft\u2019s cybersecurity positioning. \u201cWith the Security Copilot release and its recent entry into the SSE (Security Service Edge) market, we believe MSFT now has one of the most comprehensive and strategic cybersecurity solutions in the market,\u201d he wrote. <\/p>\n

The company has been making heavy investments in its business, but Kim said he doesn\u2019t see a risk to margins. \u201cWe estimate that enterprise business drives about 84% of its revenue and about 60% of its total revenue mix is recurring in nature,\u201d he noted. \u201cHence, this operating framework provides the company with enough visibility into its business and provides the framework for managing its margin profile.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

After eating up seemingly anything to do with artificial intelligence earlier this year, Wall Street has cooled its fervor, as investors have come to realize that it will take time for most companies to see material financial benefits from the technology. Still, Microsoft\u2019s medium- to long-term opportunity with the technology is \u201cundeniable,\u201d according to Loop […]<\/p>\n","protected":false},"author":1,"featured_media":35673,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-73726","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nMicrosoft\u2019s \u2018undeniable\u2019 opportunity in AI makes the stock a buy, says this bull | iFintechWorld<\/title>\n<meta name=\"description\" content=\"After eating up seemingly anything to do with artificial intelligence earlier this year, Wall Street has cooled its fervor, as investors have come to\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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